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Oregon Public Utility Commission staff, customer groups, stakeholders and Portland General Electric have reached agreement on a recommended 2011 price adjustment for PGE customers. Under this agreement, prices overall would increase about 3 percent. This agreement will be submitted as a recommendation to the Oregon Public Utility Commission, which has final authority for setting PGE prices. The Commission is expected to issue a ruling in December, with new prices likely to take effect in January 2011.
The agreement reached by these parties is the culmination of more than six months of discussion and negotiation, with several opportunities for public input. The parties worked constructively to reach a settlement that is fair to PGE customers. The agreement meets PGE’s primary goals: to set fair prices that allow PGE to make investments in the power grid and continue providing outstanding service to our customers.
What is the price change recommended in the agreement?
Under the current agreement, overall prices would increase about 3 percent. That could change, however, as load and power cost estimates are updated this fall. The average residential increase would be about 4.7 percent, before load and power cost updates. Impacts will vary, depending on the amount of electricity used by each household.
Price impacts for business customers also will vary depending on the amount of electricity used. Some business customers will pay more, while others will see electricity prices decrease. Business customers fall into one of several categories, called “schedules.” Here is the impact of rate changes on each of the schedules, before load and power cost updates:
- Schedule 7 (residential customers): Up about 5%
- Schedule 32 (small business customers): Up about 3%
- Schedule 83 (commercial customers): Up about 5.5%
- Schedule 85 (large commercial customers): Up about 1%
- Schedule 89 (industrial customers): Down about 2%
A new rate schedule, Schedule 85, has been introduced to better reflect the actual cost of providing service to customers of this size.
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Why is a price increase necessary?
Overall, the price increase will generate about $52 million more to help fund PGE’s investments in the power grid and maintain a safe, reliable system. About 75 percent of the price increase will be spent on infrastructure improvements, like the expansion of our Biglow Canyon Wind Farm and improvements to our hydro facilities on the Clackamas River. Investing in these sustainable resources now will ensure they’re available to our customers for decades to come. About one-fourth of the additional funds would cover increased operating and maintenance costs.
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What are the benefits of investing in the power grid?
Energy demand in PGE’s service territory is expected to increase 45 percent in the next 20 years. We are meeting this challenge by building new renewable power generation, and improving our existing generation facilities to make them more efficient. Investing in the power grid will mean more reliable power, more sustainable power, and more stable, predictable prices for our customers.
An example of a similar investment that is benefiting customers today is our Sullivan hydro plant in Oregon City, where our oldest hydro plant is also now our newest green plant. Due to recent improvements, salmon passage rates around the plant are now at 98 percent, and the Sullivan facility has been awarded “Low Impact Hydro” status (LIHI Certificate #33). Originally built over 100 years ago, the plant needs no fuel and continues to produce low-cost, reliable power into the 21st century.
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Where does a dollar spent with PGE go?
To see how a typical dollar is used at PGE, please see the chart, below. When you buy a dollar's worth of electricity from PGE, nearly half goes to the cost of making or buying the electricity itself.
Watch a short video that explains what goes into electricity pricing, and the factors that are driving up prices in the long-term.
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How is PGE helping customers?
Despite the fact that investments need to be made to the power grid, we don’t take this request for a price increase lightly. We understand that the economic downturn has been tough for many, so we’re doing everything we can to help our customers.
Specifically, we’re providing advice and ideas on how customers can save by using less electricity. We’re referring customers to Energy Trust incentives and state and federal tax credits. We’re offering billing and payment options that make budgeting easier. And PGE is connecting customers with assistance programs — like Oregon HEAT — that help pay energy bills for those in need. There’s even a new program that helps moderate income customers who haven’t qualified in the past.
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Why is more renewable power needed?
By 2025, a new Oregon law requires that 25 percent of the power supplied by PGE come from renewable sources. We’ve been busy developing a variety of alternative sources, from installing solar power projects along Interstate 205 to building the Biglow Canyon Wind Farm near Rufus, Oregon. With Biglow Canyon Phases 1 and 2 online, about 9 percent of the power PGE provides is from renewable resources. Biglow Canyon 3 is coming online this year and is scheduled to be completed at the end of 2010, but we’ll need even more renewable power down the road to comply with the law.
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Can we conserve power instead of investing in generation?
In our long-term resource plan currently under review by the OPUC, customers have a big role to play to help meet the growing need for electricity. In the plan, energy efficiency measures will provide for half of the growth in electricity demand.
PGE has a strong tradition of helping customers use electricity wisely. And we connect customers with cash-back incentives on efficiency improvements from Energy Trust of Oregon and state and federal tax credits. Compared to building a new generation facilities, using less power is the lower-cost option. Unfortunately, conservation and energy efficiency alone aren’t enough. The widening gap between existing supply and growing demand requires new generation sources, too.
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What is PGE doing to keep the price down?
PGE is committed to efficient, cost-effective operations. Our costs for administration, customer service and distribution operations and maintenance meet or beat average costs for other utilities in the West, according to the Western Electricity Coordinating Council.
2009 expenditures
As the population of our service area has grown, more customers are being served by about the same number of PGE workers. In 1998, PGE had one employee for every 258 customers. Ten years later, we had one employee for every 295 customers.
Customers per PGE employee
To keep the price you pay as low as possible, we’ve made long-term operational changes, like efficiency improvements at our generating plants and installing new smart meters to save millions of dollars each year. We’ve also tightened our own belts by making short-term reductions, like a 2009 salary freeze for top management and professional staff, a voluntary furlough program and reducing our reliance on contract crews. These latter cuts aren’t sustainable, and in the long-term would threaten our ability to provide safe, reliable service, but are an appropriate response to the current economy.
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Where can I get more information or updates?
To learn more about the process and to find out how to share your opinion, visit the Oregon Public Utility Commission Web site. Documents filed with the OPUC are available in our Tariff section. Visit our Determining Energy Prices section to watch a short video about how electricity prices are set.
In addition, residential customers can contact PGE Customer Service at 503-228-6322 in Portland, 503-399-7717 in Salem, or 800-542-8818 elsewhere. Customers can also e-mail PGE Customer Service. Business customers can call 800-822-1077 or e-mail the PGE Customer Service Business Team.
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